The overall objective of this research project is to better clarify the immunopathology associated with Type I insulin dependent diabetes mellitus (IDDM) and to determine if immune intervention alters the course of IDDM. The specific aims include: characterization of a cohort of patients with recent onset IDDM in terms of pancreatic islet beta cell function and immune parameters thought potentially related to the etiopathogenesis of IDDM; definition of the relationship between pancreatic islet beta cell function, various immune parameters, and HLA type; and better definition of the natural history of residual islet beta cell function and various immune parameters during the course of IDDM. In addition, this study will determine the effects of immune intervention with cyclosporine in patients with recent onset IDDM, including: the frequency of complete remission of IDDM, one year after onset, in comparison to a placebo treated control group; the effects of immune intervention with cyclosporine on degree of diabetic control, residual islet beta cell function, and immune parameters thought related to pancreatic islet immunogenicity; the relative efficacy and safety of immune intervention with cyclosporine; the evolution of diabetic microangiopathy, specifically the appearance of diabetic retinopathy and of changes in renal function. The study is a randomized, double-blind, placebo controlled clinical trial evaluating the effects of cyclosporine in patients with Type I Insulin-Dependent Diabetes Mellitus commencing within four weeks of diagnosis. The trial will evaluate up to 100-110 patients, 50-55 patients with each treatment. Patients will be stratified into three groups, prior to randomization, based on the degree of severity of IDDM at the time of initial presentation. Subjects in both treatment categories will be treated with Intensive Insulin Therapy according to the protocol outlined below. Outcome will be judged on the basis of the appearance of complete or partial remissions. Residual endogenous islet beta cell function, as assessed by C-peptide secretion, will be carefully evaluated on a serial basis. Both non-specific and pancreatic islet specific immune parameters will be monitored serially.